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Subcontracting or co-contracting of a public contract

Verified 14 May 2020 - Directorate for Legal and Administrative Information (Prime Minister)

Several companies can respond to a contract notice. It is then referred to as subcontracting when one contractor entrusts to another the performance of part of the services and co-contracting when several providers pool their professional, technical and financial resources.

Subcontracting

  • For a service contract, subcontracting is entirely possible.
  • For a work contract, subcontracting is entirely possible.
  • For a supply contract, it is possible only if it includes services or installation work. Example: a company that provides ready-to-use concrete or paving stones.

Only the contract holder has a contractual relationship with the buyer.

He is responsible for the proper execution of the contract. The subcontractor shall be accountable only to the contract holder or, in some cases, to the contracting authority.

FYI  

a subsidiary of a corporation is considered a subcontractor, which is not the case for a branch or management.

The application for approval may be submitted by the applicant or by the holder either at the time or after the submission of the offer.

At time of offer

The application must include the following:

  • Nature of subcontracted benefits
  • Name and address of the proposed subcontractor
  • Maximum amount to be paid to the subcontractor
  • Expected payment terms, including price variation criteria
  • Capabilities of the subcontractor
  • Declaration by the subcontractor that he is not subject to a ban on access to public procurement
  • Presentation of the professional, technical and financial capacities of the subcontractor.

The buyer must accept the subcontractor and its terms of payment.

If the buyer refuses the subcontractor, he must give reasons for his decision.

The notification of the public contract is the acceptance of the subcontractor and approval of the conditions of payment laid down.

After submission of the offer

The licensee shall file a return containing the following information:

  • Nature of subcontracted benefits
  • Name and address of the proposed subcontractor
  • Maximum amount to be paid to the subcontractor
  • Expected payment terms, including price variation criteria
  • Capabilities of the subcontractor
  • Declaration by the subcontractor that he is not subject to a ban on access to public procurement
  • Presentation of the professional, technical and financial capacities of the subcontractor.

The acceptance of the subcontractor and the approval of its payment conditions must then be the subject of a special act signed by the 2 parties. This document must contain all the information mentioned in the contract holder's application.

The buyer's silence for more than 21 days after receipt of the applications is equivalent to the subcontractor's acceptance.

Warning  

if the subcontract is at least €5,000 HT, the subcontractor must provide every 6 months, a attestation of vigilance the contract holder. This certificate verifies that he is complying with his reporting obligations (declarations of activity and employment) and that he pays his social contributions and contributions.

There are no direct contractual relations between the buyer and the subcontractor, but direct payment is still possible, with exceptions, to facilitate a quicker settlement.

The subcontractor shall be paid directly when the contract amount is equal to or greater than €600 TTC.

In the case of a contract awarded by the defense services, direct payment is possible if the amount of the subcontract is equal to or greater than 10% the total amount of the contract.

If advance shall be paid to the contract holder, the buyer shall deduct the amount and pay the sum directly to the subcontractor.

The subcontractor's right to an advance shall be open as soon as the public contract has been notified or the special act has been signed.

Online

The subcontractor can file his payment request on Chorus-Pro

Chorus Pro Portal

The holder has 15 days to accept or refuse direct payment.

By mail or on site

The invoice must first be addressed to the holder and sent by registered letter with acknowledgement of receipt (LRAR) or filed against receipt.

The holder has 15 days to accept or refuse direct payment.

Then, the invoice must be sent to the purchaser together with a copy of the acknowledgement of receipt of the holder.

Where the buyer has paid invoice the subcontractor, he must inform the contract holder.

Co-processing (grouping)

Co-contracting is when several economic operators choose to respond to a public contract in a group to pool their professional, technical and financial resources.

This group of operators is temporary and exists only for a defined duration.

Unlike subcontracting, all members of the group have a contractual relationship with and are responsible to the buyer.

Grouping can take 2 different forms:

In solidarity group, each member shall be financially responsible for the whole contract and for its execution, even if it carries out only part of it.

In joint group, each member shall be responsible only for the part of the benefits for which he is responsible.

Nominations and tenders shall be submitted either by all members of the grouping or by a agent..

The members of the group may give the representative power to complete the application and/or the offer. They can authorize it through the application letter (DC1 or DUME) or by delegation of specific powers attached to the application.

One of the members must be designated at the time of writing to represent the others to the buyer and to coordinate the benefits.

The form of grouping may be imposed on the holder of a contract, provided that the buyer has provided for it in consultation documents.. The form imposed must be necessary for the proper performance of the contract. Otherwise, the form of the grouping is freely chosen by the members.

The application file for a grouping must contain the following:

  • Letter of application indicating the nature of the group (joint or joint), the contact details of all members of the group and identifying the representative by detailing the powers delegated to him (DC1 or DUME)
  • Statement by the applicant which includes information on the legal form of the company, the identity of the persons entitled to hire it and the turnover of the last 3 financial years for each member of the group (DC2 or DUME)
  • If the buyer so provides in the consultation documents, the undertaking (ATTRI1 ex-DC3) must be used before the end of the procedure to formalize the contract or framework agreement concluded.

Please note

In the case of a joint and several association, the General Administrative Clauses Book (GACC) may provide for the opening of a single account opened specifically for the group. If the benefits of each are clearly identified, it is possible to provide for payment in separate accounts.

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